DCP - DCP Midstream: Better Than Expected Performance Still Not Worth Buying
- DCP Midstream provided better than expected performance during 2021, which appears likely to continue into 2022.
- Their guidance for circa 10% year-on-year earnings growth will help generate ample free cash flow during 2022 to fund higher distributions.
- Management has flagged 'meaningful' higher distributions are impending upon reaching their leverage ratio target soon.
- Whilst positive on the surface, I still feel that their leverage is higher than ideal and otherwise indicated by their leverage ratio.
- Despite sounding more bullish than bearish, I still believe that maintaining my sell rating is appropriate due to their unit price being well above where I estimate their intrinsic value.
For further details see:
DCP Midstream: Better Than Expected Performance, Still Not Worth Buying